Search and menus

Search

Topics menu

You are here:

Mortgage Qualifier Tool

This calculator helps you determine whether or not you can qualify for a home mortgage based on income and expenses.

To qualify for a mortgage loan at a bank, you will need to pass a “stress test”. You will need to prove you can afford payments at a qualifying interest rate which is typically higher than the actual rate in your mortgage contract.

Credit unions and other lenders that are not federally regulated do not need to use this mortgage stress test.

The qualifying interest rate your lender will use for the stress test depends on whether you need to get mortgage loan insurance.

If you need mortgage loan insurance, the bank must use the higher interest rate of either:

Property Information

This is the amount you expect to borrow from your financial institution. It may include the purchase price of your home plus the mortgage loan insurance.

WCAG Placeholder

Down Payment

WCAG Placeholder

Please specify how much you would like to consider as down payment. Please note that it is assumed the down payment is not borrowed.

The minimum down payment is 5% for the first $500,000, 10% for the portion of the house price above $500,000 up to 1 million dollars and 20% for any house price over 1 million dollars.

This tool does not include mortgage loan insurance when you have a down payment of 20% or more or when the property value is $1 million or more. Please note that in some situations, you may be required to get mortgage loan insurance, even if you have a down payment of 20% or more. For example, if you’re self-employed or have a poor credit history.

WCAG Placeholder

Annual Interest Rate

%

Annual interest rate for this mortgage.

WCAG Placeholder

Amortization Period

WCAG Placeholder

The number of years and months over which you will repay this loan. The most common amortization period is 25 years. Not to be confused with the term of your loan, which is the duration of the loan agreement you signed with your financial institution and that has to be renewed regularly. Terms are generally for 1 to 10 years.

Payment Frequency

By choosing an accelerated payment frequency, you can reduce your amortization period and save thousands of dollars in interest in the long run. For example, the accelerated bi-weekly payment allows you to pay half of your monthly payment every two weeks. You will therefore make 26 payments a year, the equivalent of one extra monthly payment a year.

Term

The number of term years.

Your Income and Anticipated Expenses

WCAG Placeholder

Your Gross Income

$

per

WCAG Placeholder

Please specify your yearly or monthly gross income. This value should be the total of the household income if you are buying the property with a partner.

If you have sources of income other than a salary, ask your lender if they will include these sources for mortgage qualification. For example, self-employment income, commissions, bonuses, tips, investments, rental income, spousal and child support payments, disability insurance payments, etc.

WCAG Placeholder

Heating Cost

$

per

WCAG Placeholder

Please enter an estimated value of heating cost for the property you intend to buy. Heating costs usually represent 1% of the value of the home.

WCAG Placeholder

Property Taxes

$

per

WCAG Placeholder

Please enter an estimated value of taxes you would pay for the property you intend to buy.

WCAG Placeholder

Credit Card / Line of Credit Payments

$

per

WCAG Placeholder

Please enter the total monthly or yearly value of credit card or line of credit payments. This value should be the total of your payments as well as your partner payments if you are buying the property with a partner.

WCAG Placeholder

Car Payments

$

per

WCAG Placeholder

Please enter your monthly or yearly value of car payments. This value should be the total of your payments as well as your partner payments if you are buying the property with a partner.

WCAG Placeholder

Other Debt Payments

$

per

WCAG Placeholder

Please enter your monthly or yearly value of other payments. This value should be the total of your payments as well as your partner payments if you are buying the property with a partner.

FCAC uses a Gross Debt Service (GDS) ratio of 32% and a Total Debt Service (TDS) ratio of 40% in this tool as a guideline. You may still qualify for a mortgage even if your GDS and TDS ratios are slightly higher. However, higher GDS and TDS ratios mean that you are increasing the risk of taking on more debt than you can afford.

You will likely be approved for a mortgage amount of $200,000.00 since your GDS ratio (30.26 %) does not exceed 32.00 % and your TDS ratio (39.26 %) does not exceed 40.00 %.

Mortgage Required

Request Amount

This is the actual mortgage amount you are requesting - calculated by subtracting down payment (if any) from the value of the property you specified.

$200,000.00 ($250,000.00 - $50,000.00)

Mortgage Loan Insurance Premium

The minimum down payment required is 5% of the estimated value of the property; therefore, if no down payment specified it is assumed to be 5% of the estimated value of the property.
If your down payment is less than 20%, your mortgage will be considered a high ratio mortgage and you will have to pay a mortgage insurance premium, which protects the mortgage lender in case you can no longer make your mortgage payments. This insurance is usually provided by Canada Mortgage and Housing Corporation (CMHC) or another private insurer (such as Genworth Financial). The amount of the premium will depend on the percentage you can put as a down payment:
I) If you make a down payment of 5% to 9.99%, you will pay a premium of 4.00% of the estimated value of the property.
II) If you make a down payment of 10% to 14.99%, you will pay a premium of 3.10% of the estimated value of the property.
III) If you make a down payment of 15% to 19.99%, you will pay a premium of 2.80% of the estimated value of the property.

NOTE: If your down payment exceeds 20%, the lender may still require you to purchase this insurance. In this case, the premium will be as follows:
A) down payment of 20 to 24.99%: 2.40% of the estimated value of the property.
B) down payment of 25% to 34.99%:1.70 % of the estimated value of the property.
C) down payment of 35% and up: 0.60% of the estimated value of the property. This calculator assumes that no premium is charged when the down payment is over 20%. Check with your mortgage lender.
Normally, the mortgage insurance premium is included as part of your mortgage payment. However, you may be able to pay it as a one-time payment and not have it included in your mortgage payment. Check with your mortgage lender.
This calculator assumes that the mortgage insurance premium is included in your mortgage payment.

$0.00 ($200,000.00 * 0.00 %)

Total Mortgage Amount Required

This is the total mortgage amount.

$200,000.00

Read on below about GDS (Gross Debt Service) & TDS (Total Debt Service) ratio calculations to find out how your qualification for this mortgage was determined.

This is the calculated TDS Ratio based on the values you specified: TDS Ratio Cost per month ÷ Gross Income per month. Please note that the TDS Ratio must be under 40% to be approved for the mortgage.

= 39.26 %

Based on your GDS and TDS ratios, you could qualify for a mortgage with a maximum amount of $206,325.60, or a home with a maximum cost of $257,907.01 - assuming that your down payment would be the same percentage as what you entered in the calculator (20.00 %).

Moreover, based on values you entered a summary report can be produced. The report includes all your input values, the qualification results, payment schedule as well as a list of other things to consider before applying for a mortgage. You may print the report and bring it with you when you visit the mortgage lender.

Rate This Tool

We offer this mortgage calculator as a self-help tool for your use. This tool does not replace professional financial advice. We cannot guarantee that this calculator will apply or be accurate in your situation. For example, your mortgage lender may make its calculations in a different way. All calculations are examples only.